Japan has become “the quintessential smart power” and the new “leader of the liberal order in Asia,” according to a new index of power in the region published Wednesday by a leading Australian think tank.
The release of the Lowy Institute’s Asia Power Index 2019 comes as China and the United States battle for global and regional dominance, but reveals that beyond the competition between the two titans, Japan, ranked No. 3 in the survey, lies within a “distinct tier” of leading powers that are themselves greatly influencing the region.
“There is often a temptation to reduce the complexity of Asia’s international order to a two player game between the United States and China,” the report said. “In reality the Indo-Pacific ecosystem is created and sustained by a much wider array of actors.”
Japan, as well as India, ranked No. 4 in the index, “occupy a distinct tier ahead of the most sizeable middle powers,” it said.
The survey ranked 25 countries and territories in terms of their capacity to influence regional events, evaluating state power through 126 indicators across eight thematic measures: military capability and defense networks, economic resources and relationships, diplomatic and cultural influence, as well as resilience and future resources.
Its release comes as the United States, led by the mercurial President Donald Trump, seeks to shake off what Trump sees as the shackles of the largely U.S.-created liberal international order — including longtime commitments in Asia — and as a rising China under the leadership of President Xi Jinping sharpens its ambitions amid the emerging vacuum.
Trump’s quest has so far seen him pull Washington out of multilateral and bilateral trade, climate and arms control pacts, while Xi has overseen China’s emergence as an economic and military superpower.
Japan, as the so-called quintessential smart power making efficient use of limited resources to wield broad-based diplomatic, economic and cultural influence in the region, “is helping at the margins to adapt the broader regional order” to these realities, the report said.
Despite its limited resources, it achieved a top-four ranking across the four influence measures — diplomatic influence, economic relationships, defense networks and cultural influence — while finishing in the top two, just behind China, for diplomatic influence, according to the index.
“Setting regional standards and maintaining an inclusive multilateral architecture has become a key organizing principle under the premiership of Shinzo Abe,” the report said.
This has come despite the difficulties Abe has faced in balancing the often contradictory demands and desires of Trump. As an example, the report cited Tokyo’s successful resuscitation last year of the Trans-Pacific Partnership trade pact as the TPP-11, after Trump pulled the U.S. out of the deal in 2017.
Japan, it added, has also proven a capable rival to China for infrastructure investment in South and Southeast Asia.
“It has used its economic diplomacy to offer Washington alternatives to the Belt and Road Initiative and ease developing countries’ dependence on Chinese lending,” the report said, referring to Beijing’s multi-trillion dollar infrastructure-building spree. Japan, it said, has been the dominant foreign investor in strategically pivotal countries as varied as Mongolia, Myanmar, the Philippines and Thailand.
Militarily, however, Japan has faced headwinds, the report noted, dropping from sixth to seventh place in the military capability ranking, displaced by nuclear-armed North Korea, which has the third-largest standing army in Asia.
According to Herve Lemahieu, the director of the Lowy Institute’s Asian Power and Diplomacy Program and the author of the index, while Japan is trending up on so-called signature capabilities — such as by building helicopter carriers and actual aircraft carriers, and buying more cutting-edge U.S. aircraft and weapons — its ranking fell based on the relative state of its Self-Defense Forces and the military posture of its Asian neighbors.
“In geostrategic terms, it’s the relativities that matter. Japan is modernizing, but other armed forces are enhancing their capabilities faster still,” Lemahieu said, noting however that defense investments often take a while to materialize into new capabilities and that Japan’s defense spending, despite hitting a record ¥5.26 trillion for fiscal 2019, remains comparatively low.
Abe and Trump on Tuesday showcased the emerging fruits of the two nations’ military alliance aboard the Maritime Self-Defense Force’s largest warship, the Kaga, which the Defense Ministry plans to upgrade so it can function as an aircraft carrier. It will then be able to carry U.S.-made F-35B stealth fighter jets, of which Tokyo plans to purchase more than 100.
China, which has been the primary driver of Japan’s defense buildup, according to analysts, netted the highest gains in overall power in 2019, with first-place rankings in half of the eight index measures after leading last year in only three of the eight measures.
“Despite steady advances, however, Beijing faces political and structural challenges that may make it difficult to establish undisputed primacy in the region,” according to the report.
While it was ranked No. 2 for military capability behind the United States, long-term political will and defense economics will be deciding factors in the military rivalry between the two and with Japan. Beijing’s flexing of hard and soft power, meanwhile, “remains hobbled in key respects — not least due to a lack of trust among 11 of its neighbors with whom it has unresolved boundary disputes or legacies of interstate conflict.”
In the East China Sea, Beijing is embroiled in a dispute with Tokyo over the Japanese-controlled Senkaku Islands, which are also claimed by China, where they are known as the Diaoyu.
And in the disputed South China Sea, China, Taiwan, Vietnam, Malaysia, Brunei and the Philippines all have competing claims. China has constructed man-made islands, some of which are home to military-grade airfields and advanced weaponry, in the strategic waterway. Japan and the U.S. fear those outposts could be used to restrict free movement in the waterway — which includes vital sea lanes through which about $3 trillion in global trade passes each year.